The analyst predicts significant growth potential for XRP.
Overview of the Cryptocurrency Landscape
In the realm of cryptocurrency investment, Bitcoin maintains its position as the unrivaled leader, boasting a market value of $2.3 trillion. However, various challengers are consistently attempting to close the gap.
In the market capitalization rankings, Ethereum holds a solid — albeit distant — second place behind Bitcoin. Coming up fast is XRP (XRP 1.60%), the native token of the Ripple payment network. According to analyst Geoff Kendrick from Standard Chartered, the gap between Ethereum and XRP is gradually diminishing.
Understanding XRP’s Unique Role
While Bitcoin is designed as an alternative to fiat currencies and Ethereum provides a foundation for DeFi ecosystems, XRP stands apart. Developed by Ripple, it primarily facilitates faster and more cost-effective cross-border payments. Unlike Bitcoin, XRP isn’t largely influenced by speculation and focuses more narrowly on being essential infrastructure for the evolving global payments system.
Current Payment Issues and XRP’s Solution
Today, many cross-border transactions depend on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. Though it has a global reach, it’s often criticized for being outdated and inefficient. Payments may take days to settle, undergoing various intermediary banks that impose fees for processing and currency conversion. To mitigate delays, businesses typically maintain pre-funded accounts at these intermediaries, tying up capital that could otherwise be used more effectively.
XRP’s approach offers a more efficient solution. Instead of passing through numerous banks, companies can convert their currencies to XRP, transfer it instantly across the crypto ledger, and have the receiving bank convert it into local currency. By serving as a bridge currency, XRP effectively removes intermediaries, reducing transaction fees and foreign exchange costs, while also speeding up the settlement process.
Factors Contributing to XRP’s Potential Growth
Kendrick’s optimistic view on XRP is fueled by the expectation of increased adoption of Ripple’s payment network, aided by diminishing legal uncertainties and reduced scrutiny from the Securities and Exchange Commission (SEC). These changes may lead to quicker launches of spot XRP exchange-traded funds (ETFs), enhancing access for both institutional investors and retail buyers.
Additionally, Kendrick identifies scalability issues for Ethereum as a potential hurdle. Although it serves as the backbone for many DeFi applications, it faces tough competition from quicker, lower-cost blockchains like Solana and Cardano. Conversely, XRP presents a focused value offer: efficient, high-liquidity cross-border transactions, making it a compelling choice for banks and payment processors.
Evaluating XRP as an Investment
While Kendrick’s predictions heighten enthusiasm for XRP, they come with key considerations. First, the broader adoption of Ripple does not guarantee an increase in XRP’s usage, as banks can leverage Ripple’s infrastructure without using XRP for transactions. Furthermore, despite Ripple’s recent legal victories, the competitive landscape remains formidable, with the rising popularity of stablecoins and potential central bank digital currencies (CBDCs) offering alternative solutions that could undercut XRP’s value.
As of August 18, XRP’s market cap was approximately $181 billion, exceeding that of individual companies like PayPal or Square, and matching the combined value of Coinbase and Robinhood Markets. This reflects both its scale and the obstacles ahead: for XRP to surpass Ethereum in market value, numerous favorable developments will need to align almost perfectly within a short timeframe.
Given the present uncertainties, XRP might be more suitable as an asset to keep an eye on rather than an outright buy at current prices. Currently, it seems priced optimally with substantial hurdles remaining before witnessing further valuation growth.
Adam Spatacco has no investments in the stocks mentioned. The Motley Fool holds positions in and recommends Bitcoin, Block, Ethereum, PayPal, Solana, and XRP. The Motley Fool also recommends Coinbase Global and Standard Chartered Plc and suggests the following options: long January 2027 $42.50 calls on PayPal and short September 2025 $77.50 calls on PayPal. For more details, refer to the disclosure policy.
